FTC Bars Bogus Anti-Spyware Claims

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An operation that offered consumers free spyware detection scans that “detected” spyware even if there was not any, to market anti-spyware software that does not work has been barred from making deceptive claims by a U. S. District court at the request of the FTC. The FTC will seek a permanent halt to the marketing scam and redress for consumers.

In papers filed with the court, the FTC alleges that Spyware Assassin and its affiliates used Web sites, e-mail, banner ads, and pop-ups to drive consumers to the Spyware Assassin Web site. After exposing consumers to a litany of the dire consequences of having spyware on their computers, the Web site warns, “you WILL eventually experience credit card and/identity theft and your computer will ultimately crash and cease working for good . . . It’s not a matter of if, but truly a matter of when.”

According to the FTC complaint, the Web site offers to scan consumers’ computers at no cost to determine whether they’re infected with spyware. One “scan”– the remote scan – is performed when consumers land on the Web site. The free “scan” displays a pop-up message that states, “URGENT ERROR ALERT: You have dangerous spyware virus infections on your computer. Click OK to install the latest free update to fix these errors. Immediate action is highly recommended before you continue!” The other “scan”– the “local scan” – is performed when consumers click to download the defendants’ software. Both scans warn consumers that they have spyware installed on their system.

The FTC charges that, “the defendants’ free remote scan is phony, and the defendants’ representations that they have detected spyware on the consumer’s computer are deceptive.” According to the agency, the pop-up that announces that consumers have spyware pops up automatically, even when the computer is clean and does not have spyware installed on it.

During the “local” scan consumers are warned that their computer is infected with spyware and a message flashes on the screen listing the names and file locations of the spyware on the system. Even when the computer is clean of all spyware, the defendants report that spyware has been detected, and the file folders the defendants claim contain the spyware are either empty or contain files that do not contain spyware, according to the agency.

The defendants claim that the software they sell for $29.95 will “remove all spyware programs and files” and will “prevent any future breaches.” According to the FTC, the “anti-spyware” software does not remove all or substantially all spyware, and the defendants deceptive claims violate the FTC Act, which bars deceptive claims.

The agency will seek a permanent ban on the deceptive claims and will ask the court to order consumer redress from defendants MaxTheater, Inc., a Washington corporation and Thomas L. Delanoy, its principal.

The FTC held a workshop in April 2004 titled “Monitoring Software on Your PC: Spyware, Adware, and Other Software.” On March 7, FTC staff issued a report on the proceedings, and, after reviewing more than 750 comments submitted to supplement the workshop record, the FTC staff has concluded that spyware is a real and growing problem that can impair the operation of computers and create substantial privacy and security risks for consumers’ information. Copies of the report can be found at http://www.ftc.gov/os/2005/03/050307spywarerpt.pdf Consumers who want to learn more about spyware, including how to detect it, and how to prevent it, can go to http://www.ftc.gov/bcp/conline/pubs/alerts/spywarealrt.htm

The Commission vote to authorize staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Eastern District of Washington in Spokane. The court entered a temporary restraining order on March 8, 2005, under seal. The seal was lifted March 10.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.